On March 25, 2020, the Internal Revenue Service announced steps to help people facing the challenges of COVID-19 issues. Click here to read the full text of IRS Notice IR-2020-59. The IRS refers to this program as the People First Initiative, and we have summarized its key provisions below.
If you are currently on an existing Installment Agreement, the IRS has suspended payments due between April 1 and July 15, 2020. You may suspend payments if you're unable to comply with the terms of an Installment Agreement, without being concerned that the IRS will default your Installment Agreement during this period. Keep in mind, however, that interest will continue to accrue on any unpaid balances.
Unfortunately, the IRS will not extend these relief initiatives to taxpayers who are not in existing Installment Agreements. The IRS expects nonfilers and taxpayers failing to make estimated tax payments (delinquent taxpayers), who cannot fully pay their federal taxes to enter into a monthly payment agreement with the IRS so that they can resolve outstanding liabilities.
If you are making payments under an Offer and Compromise Agreement (OIC), you have the option of suspending all payments until July 15, 2020. However, as stated above, the interest will continue to accrue on your unpaid balances.
As it relates to OIC filing requirements, the IRS will not default an OIC for taxpayers who have not filed their 2018 tax return. You should, however, file any delinquent 2018 return (and your 2019 return) on or before July 15, 2020.
If you're an employee subject to federal tax withholdings and you have not filed returns for tax years before 2019, you should submit those delinquent returns to claim tax refunds. Taxpayers who qualify for tax refunds still have time to claim refunds for 2016, 2017, and 2018 tax returns. If you are self-employed or your federal tax withholding was insufficient, you may have a tax liability, and you should consider taking this opportunity to resolve any outstanding obligations by entering into an Installment Agreement with the IRS.
If you have received notice from the IRS Collections function that field revenue officers have issued liens or levies, the IRS will suspend those liens or levies during this period. Since the IRS designed these initiatives to help those with financial difficulties, IRS field revenue officers will continue to pursue high-income nonfilers and perform other similar activities where warranted.
Beginning on April 1, 2020, the IRS will suspend its Automated Collection System (ACS) so that it does not send new automatic systemic liens and levies. However, ACS will resume sending liens and levies after July 15, 2020.
Finally, unless assessment statutes of limitations are imminent, the IRS may not start a new field, office, or correspondence audit.
We can help if you are a nonfiler, a delinquent taxpayer, or you need assistance resolving your tax issues with IRS. Learn more about our experienced tax professionals, view testimonials from our previous clients, or contact the Law Offices of Charles R. Frazier to set up your appointment today.